US and Japan Coordinate Intervention to Prop Up Weakening Yen

The US and Japan have coordinated to intervene in the foreign exchange market to prop up the yen, marking the first joint operation between the two nations since 1998.

The move was prompted by concerns that a weak yen could destabilize global markets, particularly the U.S. Treasury markets, which are already grappling with rising long-term borrowing costs.

Louise Loo, head of Asia economics at Oxford Economics, suggested that US participation in the intervention may have been motivated by self-preservation: 'There is a self-preservation element here.'

Masahiko Loo, senior macro strategist at State Street, noted that the use of the Federal Reserve's FIMA repo facility to fund the intervention was a key aspect of the operation.